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Netflix (NFLX) has a content problem, although not the content problem you think.
The popular streaming service, which announced Wednesday it had signed “American Horror Story” producer Ryan Murphy to a multiyear, multimillion dollar deal to exclusively create content for it, now faces a problem unique to its aggressive business model: too much content and not enough room for that content to succeed as it should.
Earlier this month, Netflix made a huge marketing push for “Altered Carbon,” a futuristic, “Blade Runner”-esque 10-episode series that may have cost over $7 million an episode based on some outside estimates. But just two days after the costly show premiered, Netflix essentially thwarted any promotional momentum the show had built up by revealing a new original film called “The Cloverfield Paradox” during Super Bowl LII. The publicity stunt worked and spurred a ton of chatter on social media and quick-hit movie reviews. But it also highlighted the real problem Netflix now has with the model of incessant content production it pioneered: by releasing and promoting its sci-fi flick the way it did, Netflix cannibalized users’ attention away from its just-announced sci-fi show.
“Netflix has been great at developing a lot of content, but what it hasn’t been great at is the traditional, Hollywood style of marketing and creating enough buzz around shows,” explains Omar Akhtar, an analyst for the San Francisco-based Altimeter Group. “That’s not where their budgets lie. They’d rather spend on great content.”
Improving quality control
Indeed, that’s why traditional film studios don’t usually release more than one film on the same weekend: They don’t want to shoot themselves in the foot by forcing people to choose — a tactic that could hurt the film studios’ revenue.
The streaming service could also get better at picking the content they should produce, not to mention killing content that’s underperforming. Last year, Netflix got more aggressive with canceling shows that weren’t well received. After only one season it canceled “Girlboss” and “Gypsy.”
“I think they can do a bit better in terms of quality-control and what they think is going to test well,” adds Akhtar. “They’ve got a ton of data available to them.”
Netflix said it does use data-driven tactics to figure out what users watch and which kinds of content it should produce.
The company hasn’t revealed what “Altered Carbon’s” viewership looks like so far, however, it may have to settle for a slow burn, with users discovering and tuning into the show over a longer stretch of time rather than having an instant hit on its hands. But in terms of having a chance to linger in the public consciousness in any significant way — the same way a new theatrical film release generates opening-weekend buzz and ultimately, creates an ongoing conversation through social media, news and word-of-mouth — “Altered Carbon” never got that chance. Instead, Netflix may have inadvertently sacrificed a potentially good series for a Super Bowl marketing gimmick hawking a film that received a 18% “Rotten” rating on Rotten Tomatoes.